Benefits to Investing Through & Contributing to an RRSP

I wanted to take a moment to explain the benefits of investing through an RRSP (Registered Retirement Savings Plan).

An RRSP is a government-registered savings plan that allows you to save for your retirement in a tax-efficient way. Contributions made to an RRSP are tax-deductible, which means that they can be used to reduce your taxable income for the year in which they are made. This can result in a lower tax bill for the current year and more money to invest for your future.

Investing through an RRSP also allows your money to grow tax-free until you withdraw it at retirement. This means that any capital gains, dividends, or interest earned on your investments will not be subject to taxes until you take the money out.

Additionally, RRSPs offer a variety of investment options, including stocks, bonds, mutual funds, and exchange-traded funds, allowing you to diversify your portfolio and potentially earn higher returns on your investment.

In summary, investing through an RRSP can help you save for your retirement in a tax-efficient way, allowing your money to grow tax-free and providing you with a variety of investment options. I recommend considering contributing to an RRSP as part of your overall financial plan.

Important RRSP Information & Deadlines

The RRSP deadline for 2022 is midnight of March 1st, 2023.  As always, late contributions cannot be accepted and cannot be backdated.

Regarding the RRSP deadline date, funds must be received by PI on March 1^st  to be included on the last contribution receipt for the tax year.  Cheques received in the mail after March 1^st cannot be backdated.  Please note that sending of funds by the banking bill payment process can take up to 3 days to be received by PI.  We will only be including funds as a contribution if funds are received in PI’s bank account by March 1^st  (even if you initiated the payment before March 1^st). 

Contribution Limits

The RRSP contribution limit for 2022 is $29,210 and the limit for 2023 is $30,780. 

Please note however that the formula for determining an individual’s contribution limit has not changed and remains at 18% of the taxpayer’s earned income for the preceding taxation year.  As such, the maximum contribution that may be made to a RRSP is the lesser of 18% of the annuitants earned income for the preceding taxation year, up to the maximum for the corresponding year indicated above. 

Spousal RRSP Accounts

Please be advised that unless indicated otherwise, we assume all contributions made to a spousal RRSP account are spousal contributions. 

If you wish to make a regular contribution (non-spousal) to a spousal account, you must indicate this clearly on the cheque or on the instructions that are provided to us.  We cannot amend any tax slips to be a personal contribution in a Spousal RRSP if a client did not inform us that it was a personal contribution at time of deposit.

Contribution Receipts for 2022 Tax Year

Contribution receipts for tax year 2022 for all contributions made between March 2nd, 2022 - December 31^st, 2022 were mailed out in mid-January. 

All subsequent contributions made for tax year 2022 made between:

January 1^st, 2023 – February 17th, 2023, will be mailed out end of February.

February 20^th, 2023 – March 1st, 2023, will be mailed out Mid March

Any contribution received from January 01 – March 1st, 2023 will automatically be assumed as contribution for year 2022 unless otherwise specified.

Please contact me if you have any questions pertaining to RRSPs or if you would like to discuss further (jhayek@pifinancialcorp.com)